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... the ... it's now the question of what and ... but ... now ... the cost of borrowing will rise WSJ's chief Economics correspondent has been investigating this and the Fed plans to do an e joins us now to explain ... that Sean thank you very much for being map is that ... some all land but ... now things again a demand increase on the cost of borrowing ... they explained because the format outside moment think of well you know that that the Fed sets the short-term interest rates ... surely this coming October Credit ... and yet when they read you'll you'll pay so it's us leave the Republic added ... it's extremely complicated and ... yell at the bottom of it is two point six trillion dollars of reserves it to pay the Fed has pumped into the banking system ... there's so much money basically an apparent that the Fed can't use the old told the news ... to raise interest rates but wants to its got up by the differ way to do it ... the reason we're focusing on it this week as ... we stood there can be made it's coming out of the Fed's last policy meeting in April ... and I that we think that there's going to be some discussion of this that ... discussions of debt that power the plumbing of the financial system ... was it an important part of that last meeting and build up was also giving a speech ... out tomorrow where he could bring it out ... so they're they're really talking about intensively ... they can't do it the way they use to do it ... okay so what what will it be focusing on one when they decide how to do things ... I understand there was no set formula fall while the going to do because the mock it's changing and that tactics nice that and what what things they consider it ... also let me explain how they use to do it and then how they're talking about doing it now so ... the way they use to do it is that there were reserves in the banking system very small numbers and a few billions ... and banks would trade these reserves ... and the Fed would change the level of reserves in order to get the interest rate in these trades ... where one day ... but cuz there's trillions of reserves in the banking system that they that they can control the supply of these reserves the way these two ... so basically what they're going to do that with targeted they're going to say ... hello pay the interest rate they're going to come ... basically the floor of the financial system ... they will pay banks for these reserves ... and then the interest rate that they pay banks for the reserves should be the case ... Reserve cut interest rate for the whole system ... the problem there are wrestling with is up to the United States is a very big shadow finance system ... they've got a system that there's money that flows outside of the banking system the Fed is trying to figure out how to control those rates to ... and that's where something called reverse repos comes and ... there to try this database I'd trade that happen outside of the banking system to it raises all kinds of complicated question one am when we got a definition on screen I were the sweeper a repurchase agreement with the sweep up by securities and sell at a higher price of solar lights up on this is when thinking of the Fed is can be very active in the financial markets in the voting basically the fixed income ... securities markets at the very short end of the situation ... that some that that's interesting it's not really being done with it quite as extensively as your talking about asset other than that time to submit crisis to put strain on the Fed ... the sample questions into whether they can achieve what they want to ... well so ... they're very confident that they can achieve what they want to do but you explain the well site in it and that's really the big issue is ... they're going to be very active ... in short-term trading markets and credit markets and out ... overnight rates ... and what what is really the it raises all kinds of issues for them there basically to become active in a market ... where money market mutual funds are very active right now it's called repo trading ... so what did ask themselves is ... you know when they become a big player in this market ... what effect does that happen the plumbing in the financial system ... one of the things that are wrestling with right now is that ... they want to be careful not to tilt the balance ... of the way the financial system works ... toward money market mutual funds and away from banks ... you money market mutual funds ... are not very regulated ... and there's no safety net under them banks are highly regulated and they have ... FDIC fees they have a safety net ... that that that that was very active in those repo market where money market mutual funds are ... trading very aggressively ... well it could tilt the balance towards those guys to do they really wanna be tilting the balance ... of the financials system towards his very un regulated part of the market ... it's a complicated and very challenging think ... that there to be doing we think it starts sometime in twenty fifteen ... okay ... well we'll stay to thank you Brian much as always ... WSJ's Jon Hilsenrath ...